'60 Trillion Duplication' Bithumb and '44.5 Billion Stolen' Upbit... Can K-Crypto Exchanges Be Trusted?

▲ Bithumb's '60 Trillion Won Duplication' and Upbit 'Robbed of 44.5 Billion Won'... Can K-Coin Exchanges Be Trusted?/Gemini-generated image

With the Digital Asset Act just around the corner, a series of major incidents... gaping holes in internal control systems

Bithumb and Upbit, which dominate South Korea's digital asset market, have triggered consecutive mega-scale incidents, driving investor trust to the ground. The '60 trillion won ghost Bitcoin' incident and the '44.5 billion won hacking' case went beyond simple mistakes, starkly exposing the lax internal controls and security systems of domestic exchanges. Unfolding ahead of the enactment of the Framework Act on Digital Assets, these 악재 pour cold water on the institutional settlement of the 'K-coin market.'

◇ Creating '60 Trillion Won' With One Click... Bithumb's Absurd 'Digital Alchemy'

The 'Bitcoin misallocation incident' that occurred at Bithumb on the 6th was a farce hardly believable for a financial system. When a single employee mistakenly entered the event prize unit as 'Bitcoin (BTC)' instead of 'won,' more than 620,000 Bitcoins worth over 60 trillion won were conjured out of thin air and distributed to customer accounts in an instant.

The problem was that a quantity twelve times greater than the Bitcoin Bithumb actually held (about 42,000 BTC) circulated without any safeguards. This exposed a fatal flaw in centralized exchanges' (CEX) ledger-based transaction model. Bithumb explained it was "only a system display," but some customers had already rushed to sell, briefly sending Bitcoin prices plunging to 81.11 million won and causing real market disruption. Losses worth 13.3 billion won that could not be recovered are ultimately set to be covered with Bithumb's own funds.

◇ 'Largest in Korea' Upbit Breached Again After Six Years

Upbit also suffered a blow to its reputation with a hacking incident worth 44.5 billion won last November. Coincidentally occurring on the same day it announced a merger with Naver, the breach resulted in the helpless theft of 24 Solana-related coins. The hacking, repeated six years after the 58 billion won Ethereum theft in 2019—and on the same date—raises doubts about Upbit's security awareness.

Dunamu said it would "cover the entire amount with company assets" in an effort to contain the fallout, but anxiety persists that second and third hacking incidents could occur at any time without fundamental improvements to security systems.

◇ 'Only Regulation Is the Way to Survive'... Financial Authorities Signal High-Intensity Crackdown

In response to the string of major incidents, financial authorities have drawn their swords. The Financial Services Commission plans to significantly raise regulatory intensity by codifying 'strict liability without fault' for virtual asset operators and mandating regular external audits. In particular, spurred by the Bithumb incident, authorities are poised to push improvements in governance, including tougher suitability reviews for major shareholders and limits on ownership stakes.

An industry insider criticized, "It's shocking that trillions of won were managed on systems that can't even validate basic input values," adding, "These incidents show that while domestic exchanges have grown in size, their substance is at the level of mom-and-pop shops." Attention is focused on whether this episode, erupting ahead of the implementation of the Framework Act on Digital Assets, will become the signal flare for a high-intensity restructuring of the entire virtual asset industry.

*Disclaimer: This article is for investment reference only, and no responsibility is taken for investment losses based on it. The content should be interpreted solely for informational purposes.*

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